In the updated version of Gmail for Android, the picture of contacts is shown in the conversation list. To show or hide sender picture on Gmail for Android phones and tablets, just do as follows:
1. Open "Gmail" App and go to "Settings" (Depending on your phone, you may hit the Menu Button or tap the three dot icon)
2. Tap "General Settings"
3. Mark "Sender Image", so the picture is shown beside sender name in conversation list